How should I handle this bad debt?

[MyLoFICO]

This is a loan for University of Phoenix. It's not a student loan because I dropped the class before they got funding from the Dept of Ed. This is owed directly to UoP. This is the only thing bad on my credit. I want it gone because I get declined for alot of cards due to this. So, what should I do with it?

http://imgur.com/DmFQ462

[Anonymous]

In order of what to attempt

1. Negotiate a settlement in exchange for deletion 
2. Pay in full in exchange for deletion
3. Settle it and let it naturally age off your report next year
4. Pay in full and let it naturally age off your report next year

Give this thread a read on pay for delete (it's long, but worth it)

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Example-Letter/m-p/4519#U4519

[MyLoFICO]

Thank you. I will take a look at the thread before I call to make sure I have all my ducks in a row. 

[RobertEG]

It was opened in 2007.

When did you first become delinquent on the loan?

That date of first delinquency, not shown in the posted information, is the base date for determination of when the charge-off will become excluded, which is no later than 7 years plus 180 days from the DOFD.

What is the DOFD?

[MyLoFICO]

It was never paid on at all because it never should have happened. I dropped the classes within their guidelines but they never closed my records in time so I refused to pay. The rep I had got mad when the DOE decided not to fund the loan. I have never talked to them about the loan because I was told it would reset the clock. What you see here is all I know of the loan. What you see there is what is on my EQF CR and this is what I just pulled from Experian. it is not on my TU report. Should I call and ask or would that be a rest of the clock?

http://i.imgur.com/LISmXYE.png

[RobertEG]

So the issue is one of whether you have a legal debt obligation to the school...

They say you do, and have decided to report that determination to your credit report.

If informal attempts to resolve that issue have failed, then you will likely need to get a determination from the court as to your legal liability.

I would recommend consulting an attorney for advice on possible civil action contesting the debt.

In the meantime, their reporting of a charge-off triggered their requiremnt to have reported the DOFD to the CRA.  See FCRA 623(a)(5).

That DOFD is of record in your credit file, and is the only date upon which the CRA determines when the charge-off must become excluded from your credit report.

If the commericial report you have obtained does not show the DOFD, then try viewing your full report at annualcreditreport.com.

[MyLoFICO]

I pulled from the annulacreditreport and found these. Looks like 1-1-17 is the drop off date and DOFD is 4-2010.

http://imgur.com/AsjZ8L8

http://imgur.com/xUIz6Sw

[RobertEG]

Based upon what you have said about the debt, that does not sound right.

They report the account as having been opened in 2007.

What happened for that approx three year period after which it was opened, no payments were made, and yet you had no delinquency until 2010?

If they assert a legit debt on an account opened in 2007 and you never paid anything, the DOFD should be back when.........

I would look at a possible dispute of the reported DOFD, which if you show is more than 7 years plus 180 days ago, will require exclusion of the CO from your credit report.

[MyLoFICO]

Late 2007-early 2010 I was in my Associates period. I have student loans for that period that are in good standing. The way they do billing is they fund it, get your student loan approved and then pay themselves off. This charged off amount is for the first 2 classes of my bachelors degree that I never completed with them.

[RobertEG]

So........

when, under the terms of your contract, was your first payment due?